OPTINREALBIG.COM, LLC v. IRONPORT SYSTEMS

The opinion of the court was delivered by: SAUNDRA ARMSTRONG, District Judge

ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

This matter comes before the Court on the motion for a
preliminary injunction filed by plaintiff OPTINREALBIG.COM, LLC
("OptIn") to enjoin certain activities of defendant SPAMCOP.NET,
Inc. ("SpamCop") a wholly owned subsidiary of IronPort Systems,
Inc. Having read and considered the arguments presented by the
parties in their moving papers, and at the May 18, 2004 hearing,
the Court hereby DENIES OptIn's motion for preliminary
injunction.

I. ADMINISTRATIVE ISSUES

During the May 18, 2004 hearing, the Court specifically
requested a supplemental declaration from SpamCop that explained
technical issues regarding how SpamCop's software functions. The
Court did not request the same from OptIn. Nevertheless, OptIn
took the liberty of submitting not only supplemental declarations
to bolster its arguments, but a supplemental brief regarding
issues related to the Communications Decency Act. Notably,
OptIn's submissions were filed on May 25, 2004, a week after the
Court held oral argument. Such uninvited submissions are
inappropriate and violate the notions of fairness that underlie
the judicial process. OptIn should be aware that future abuses of
the judicial process may result in sanctions.

The Court GRANTS SpamCop's motion to strike the supplemental
brief and declarations. [Docket No. 53]. Lest there be any doubt,
even if the Court had considered the supplemental filings, they would not change the Court's determination regarding OptIn's
motion for a preliminary injunction or the Court's reading of the
Communications Decency Act. The supplemental declarations and
briefing are not persuasive and, in fact, at some points actually
bolster SpamCop's position.

II. BACKGROUND

At the center of this case is a debate about bulk commercial
e-mails, whether they are legitimately solicited or unsolicited
mail known as SPAM, about those who make a living sending bulk
commercial emails, about those who make a living trying to
destroy spam senders, and about how these two business can
coexist. Plaintiff in this case, OptIn, is in the business of
sending bulk commercial e-mails. Defendant, SpamCop, is in the
business of collecting complaints from recipients of alleged spam
and forwarding these complaints to Internet Service Providers
("ISPs") who supply internet bandwidth to the purported spammers.
OptIn alleges that SpamCop has inflated the complaints against
OptIn, which has in turn caused ISPs to curtail the bandwidth
they allow OptIn, which in turn affects OptIn's ability to send
out e-mails it is contractually obligated to send.

A. What is Spam

Spam is "unsolicited e-mail, often of a commercial nature, sent
indiscriminately to multiple mailing lists, individuals, or
newsgroups; junk e-mail." American Heritage Dictionary of the
English Language, (4th ed. 2000). As much as 80 percent of the
e-mail received through the nation's largest ISP, America Online,
is spam. (Newby Decl., Exh. F.1, Newsday, Junk Mail Joust
(June 22, 2003)) AOL filters 2.4 billion spams a day. (Id.)
According to one consulting firm, coping with spam will cost U.S.
companies more than $10 billion this year in cash wasted. (Id.)
According to another research group, around $2 of the typical
monthly Internet service bill goes toward fighting spam. (Id.)

A representative for Sonic.Net, an ISP, has complained that,
"Spam consumes system resources such [as] disk storage space,
processor cycles and bandwidth, which slows delivery of normal
communications . . . and consumes, and in most cases wastes, the
time and energy of network administrative personnel and users."
(Cummins Decl. ¶ 4.) Mr. Cummins describes spam as a "pernicious
problem for ISPs . . . [as it is] relatively inexpensive for the
sender to send compared to the costs of printing and mailing
paper advertisements, and yet imposes a heavy cost on ISPs and
their customers who do not wish to receive spam." (Id.) These costs include "[f]iltering incoming
mail, protecting network security and clearing spam from users'
email inboxes [which,] takes a significant amount of time and
resources, including the time and energy of [an ISP's] staff of
system administrators and purchase or development of spam
filtering software tools." (Id.)

In response to these growing concerns regarding spam, in
December 2003, Congress enacted the Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003, or the
CAN-SPAM Act of 2003. Pub.L. 108-187 (Dec. 16, 2003) ("CAN-SPAM
Act" or "the Act"). It took effect in January 2004. In enacting
CAN-SPAM, Congress found that:

The convenience and efficiency of electronic mail are
threatened by the extremely rapid growth in the
volume of unsolicited commercial electronic mail.
Unsolicited commercial electronic mail is currently
estimated to account for over half of all electronic
mail traffic, up from an estimated 7 percent in 2001,
and the volume continues to rise. Most of these
messages are fraudulent or deceptive in one or more
respects.

CAN-SPAM Act, Pub.L. 108-187, § 2(a)(2).

Congress further found that "[t]he receipt of unsolicited
commercial electronic mail may result in costs to recipients who
cannot refuse to accept such mail and who incur costs for the
storage of such mail, or for the time spent accessing, reviewing,
and discarding such mail, or for both" and that spam "also
decreases the convenience of electronic mail and creates a risk
that wanted electronic mail messages, both commercial and
noncommercial, will be lost, overlooked, or discarded amidst the
larger volume of unwanted messages, thus reducing the reliability
and usefulness of electronic mail to the recipient." CAN-SPAM
Act, Pub.L. 108-187, § 2(a)(3)-(4).

Accordingly, "[t]he growth in unsolicited commercial electronic
mail imposes significant monetary costs on providers of Internet
access services, businesses, and educational and nonprofit
institutions that carry and receive such mail, as there is a
finite volume of mail that such providers, businesses, and
institutions can handle without further investment in
infrastructure." CAN-SPAM Act, Pub.L. 108-187, § 2(a)(6).

B. SpamCop SpamCop is an interactive Internet-based service whose mission
is to reduce spam by reporting complaints to ISPs that provide
Internet access to the senders of spam ("spammers"). (Haight
Decl. ¶¶ 2-3). Whereas many anti-spam companies provide filtering
services, which blocks an anti-spam customer from receiving spam,
SpamCop goes one step further. It forwards complaints to ISPs to
encourage ISPs to sanction spammers, including cutting off the
spammers bandwidth (e.g. their access to the Internet). (Haight
Decl. ¶¶ 4-6). SpamCop's founder, Julian Haight, has stated that
he has helped close many spammers' e-mail accounts. (Piepmeir
Decl., Exh. A, New York Times, To Protest Unwanted E-Mail,
Spam Cop Goes to the Source (June 24, 1999)).

1. How the SpamCop System Works

SpamCop's registered users forward what they believe to be spam
to SpamCop. SpamCop determines the ISPs from which the alleged
spam was sent, including the ISPs supporting banner ads that
accompanied the spam. (Haight Decl. ¶ 4.) Typically, spammers are
able to disguise their identity by, for example, using fictitious
e-mail addresses, or ones that are closed within a short time
after mailing. CAN-SPAM Act, Pub.L. 108-187, § 2(a)(7). SpamCop
addresses this issue by using a combination of Unix utilities
(the utilities employed by most e-mail systems) to cross-check
all the information in an e-mail header and find the e-mail
address of the administrator on the network where the e-mail
originated. (Haight Decl., Exh. A, SpamCop.net: What is this?
How does it work? How do I Use it?).

To find the originating ISP, SpamCop software breaks down the
e-mail header into its component parts ("parsing"), and then runs
a thorough search on the IP addresses to determine the
originating network. (Haight Supp. Decl. ¶ 11.) A reported
message may contain information in its headers indicating
numerous potential sources. (Haight Supp. Decl. ¶ 12.) In some
cases, the sender of bulk e-mails may send messages through
multiple ISPs. (Id.) In those instances, SpamCop alleges that it
is difficult to determine the exact originating ISP, and
therefore, it forwards the complaint to all of the ISPs through
which the message may have been sent. (Id.) Additionally, web
site or banner advertisement links in the message may indicate
the actual source that is responsible for the message. (Id.) For
example, if a reported message contains a banner advertisement
for "AcmeMortgages.com," it is possible that the entity that is
ultimately responsible for the e-mail is AcmeMortgages.com. (Id.)
In some circumstances, there are also red herring links to websites in a report message that the
senders include in an apparent effort to make it difficult for
recipients and software like SpamCop's to determine the true
source of the message. (Id.)

Once the IP addresses are parsed from the e-mails, SpamCop's
system determines the address at an ISP to which the e-mail
should be reported. (Haight Supp. Decl. ¶ 13.) SpamCop
cross-checks the IP addresses in the message headers against
numerous internal and online databases  including but not
limited to SpamCop's internal database. (Id.) SpamCop uses a
number of sources including default postmaster and abuse accounts
maintained by the ISPs, a database maintained by Abuse.Net (an
independent third party that tracks addresses at ISPs for the
submission of e-mail abuse complaints), and routing information
that SpamCop has gathered. (Id.) In addition, ISPs sometimes
designate one or more individuals within their organization to
whom complaints about spam may be directed. (Id.)

SpamCop's registered users who report purported spam may add
comments to the report. (Haight Decl. ¶ 4.) When SpamCop forwards
the user's complaint, it does not add any comments or criticism
of its own. Instead, it states: "This message is brief for your
comfort. Please follow links for details." (Haight Supp. Decl. ¶
14.) An ISP administrator who clicks on the links will be sent to
a page on SpamCop's website. On that page SpamCop explains to
ISPs that it has tracked the source of purported spam to the ISP.
While it encourages the ISP to take action against the spammer,
it also cautions, "Please be careful when taking action. It is
possible (though unlikely) that the account is what we call `an
innocent bystander.'" (Haight Decl., Exh. C, SpamCop.net:
Introduction  What is this thing? How does it work?) SpamCop
also states, "SpamCop administrators do not, and cannot verify
the claims made by it's [sic] users. Not only are there simply
far too many reports filed for anyone to manually review them,
but even if it were to, there is no way for us to know whether a
user actually did or did not solicit a message prior to reporting
it as spam." (Id.) It also gives ISPs the option of not receiving
these unsolicited reports.

2. Removal of the Registered User's Names

When it forwards the report to the ISPs, SpamCop removes the
e-mail address of the registered user. (Haight Decl. ¶ 9.) Its
purpose in doing so is to protect the privacy of the registered
user. (Id.) SpamCop believes that if it did not remove the
registered user's e-mail address, the registered user could be
subjected to retaliatory actions, including hacking attacks or
being flooded with spam. (Id.) Registered users also prefer that their names be removed. (Block Decl. ¶
10.)

SpamCop also admits, however, that it removes the names to
preserve the efficacy of its business by preventing spammers form
"list washing." (Id.) List washing is a process whereby spammers
remove the very small percentage of people on their bulk lists
that actually report spam. SpamCop believes that if spammers
could target and selectively remove those persons reporting spam,
they could evade detection and continue to send unsolicited bulk
e-mail messages to other recipients. (Id.)

C. OptIn

OptIn states that it is not a spammer, but rather a sender of
bulk commercial e-mails in compliance with federal laws. (Richter
Decl. ¶ 2.) OptIn provides "opt-outs" on e-mails it sends, and it
sends e-mails only to those Internet users who have directly
opted-in, or indirectly opted-in by visiting a particular
website. (Id.) OptIn contracts with ISPs to provide OptIn
bandwidth so that it may meet its contractual terms to send
e-mail advertisements on behalf of OptIn and its customers.
(Richter Decl. ¶ 3.) It needs a great deal of bandwidth because
it sends "millions" of e-mails each day. (Richter Decl. ¶ 2.)

OptIn is, however, the target of parallel suits by the Attorney
General's Office of the State of New York and Microsoft
Corporation for sending what these two plaintiffs describes as
spam. (Newby Decl., Exh. C.) OptIn's founder, Scott Richter, has
been described in various press reports as "the world's
third-largest spammer." (Newby Decl., Exh. D.) Numerous other
articles submitted by SpamCop also describe Mr. Richter and OptIn
as spammers, responsible for billions of unsolicited bulk
commercial e-mails. (Newby Decl. Exh. F.) In other words, SpamCop
is not the only entity describing OptIn as a spammer.

OptIn's principle ISP is a company called Optigate. On or about
April 29, 2004, Optigate informed Mr. Richter that its upstream
provider, Above.net, had terminated some of Optigate's bandwidth
because of OptIn's violations of Above.net's "Acceptable Use
Policy" (which prohibits spamming). (Richter Decl. ¶ 10.)
Above.net did not specifically state that the violations came to
its attention through reports from SpamCop.

OptIn has been informed by Optigate that if it, or Above.net,
continue to receive SpamCop reports regarding OptIn, they will be
forced to terminate OptIn's bandwidth entirely. (Wolfe Decl. ¶
4.) Other ISPs who provide OptIn with bandwidth have informed
OptIn of the same. (Morrison Decl. ¶ 5.) D. The Dispute Between SpamCop and Optin

OptIn alleges that SpamCop sends multiple copies of the same
reports to ISPs, which inflates the actual number of reports
against OptIn. In other words, one complaint becomes multiple
complaints that cannot be distinguished because SpamCop has
removed the registered user's e-mail address from the reports.
(Wolfe Decl. ¶ 3.)

Officially, SpamCop discourages individuals from submitting
more than one complaint regarding a single spam. (Haight Decl. ¶
8.) SpamCop attempts to remove duplicative submissions and states
that it takes corrective action against individuals who submit
duplicate requests, up to and including banning complaints from
individuals engaged in this practice. (Id.)

SpamCop further explains that it does not intentionally send
multiple copies of the same complaint to the same ISP. Its
software is not designed to do so. (Haight Supp. Decl. ¶ 20.) If
the multiple copies are being sent, it is for one of three
reasons. First, it may be because the ISP has directed that
complaints be sent to more than one recipient within its system.
(Haight Supp. Decl. ¶ 13.) Second, if the ISP supported both the
e-mail and the banner ad, then SpamCop may report two issues, one
that the purported spam passed through the ISP's network, and two
that the ISP hosted a banner ad appearing in the purported ...

Our website includes the first part of the main text of the court's opinion.
To read the entire case, you must purchase the decision for download. With purchase,
you also receive any available docket numbers, case citations or footnotes, dissents
and concurrences that accompany the decision.
Docket numbers and/or citations allow you to research a case further or to use a case in a
legal proceeding. Footnotes (if any) include details of the court's decision. If the document contains a simple affirmation or denial without discussion,
there may not be additional text.

Buy This Entire Record For
$7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.